RE:RE:!!!!!!!!!!!!!,,,,,,,,,,,,,LIND Partners DEAL......OUCH !!!!!The convertible security to be issued pursuant to the first drawdown under the Funding Agreement will have a two-year term and will accrue a simple interest rate obligation of 10% per annum on the funded amount, which is prepaid and attributed to the face value of the convertible security upon issuance, resulting in a face value of $3,300,000 (the "Face Value"). Lind will be entitled to convert the Face Value amount over a 24 month period, subject to certain limits, at a conversion price equal to 85% of the five-day trailing volume weighted average price of Avalon's common shares prior to the date of conversion.
This IS the way LIND Fundings Are DONE
So the First Thing LIND Does is to ADD the TOTAL INTEREST Cost to the Face Value of
Every DrawDown__So this DrawDown of 275000 Results in a DEBT of 3300000
By FAR the WORST is That the CONVERSION Rate IS Way BELOW Market Price
@ 85%
Pretty much ALL the OTHER Convertible Financings I HAVE SEEN Set the Conversion
Rate @ a FIXED PRICE__THUS a Lot NEVER Get CONVERTED as the Fixed Price
OFTEN Ends Up MORE THAN the Current Share Price.
BUT WITH a 85% Rate LIND Does NOT CARE About WHAT the Share Price DOES in the
months ahead__And AS SOON AS they Convert They Normally WILL SELL the Shares
they Just Got__Usually Driving DOWN the Share Price in Time for the NEXT DrawDown
After a Few Cycles of DrawDown__Convert__Sell__The DAMAGE to US Retail Share
Holders USUALLY IS BAD__With EVER INCREASING Dilution at EVER LOWER Share
Prices